Wednesday, June 22, 2011

Today Timbor Home Limited made fabulous listing on the bourses. The share opened at ì72 on NSE, touched the high of ì99 and finally closed at ì91.5.

At closing price the issue gave whopping 46 % returns against the issue price of ì 63.

What is reality?

Timbor Home was a small issue of only 36,90,000 shares, while today’s trading quantity is 4,37,14,948 shares, which is almost 12 times of the issue size; and only 4 percent of traded quantity was settled by the delivery.

This happened due to high-volume speculative day trading done in Timbor Home limited share by some brokerage companies and which brokerage houses took part in speculative trading are shown in the following picture.

Had the stock had good fundamentals, these entities would have not gone for day trading and instead would have taken the delivery?

In the analysis report of Timbor Home, I had advised investors not to subscribe this issue; investor should not be baffled by lucrative listing gain and should stay away from this stock.

Those, who have invested in this stock, should book profits as they never know when speculation shall cease and this stock shall start retracing.

No one knows, how long speculative trading shall continue, it’s always better to stay away from such stocks.